Study On The Motivation And The Trade Effects Of Singapore's Direct Investment In China

Singapore direct investment in China is an important part of FDI of China. In 2008, Singapore became the second largest country's investor after Hong Kong, in 2009, it ranked 3 and then it ranked 2. While Singapore direct investment in China has a quite high proportion of Singapore DIA. In 2009, Singapore's DIA is $ 5,979,000,000, which the $ 3.605 billion to China, about 60 per cent. Research this paper is very important between China and Singapore. Since most of the scholars researched from the perspective of History, and looked into the future trends of Singapore direct investment. There are little scholars to study on the motives and factors in Singapore direct investment in China, but they are so critical.There are too many effects of Singapore direct investment in China:enhance Chinese economic growth, upgrade industrial structure, promote Chinese innovation capability, extend the competitiveness of Chinese market. This paper will study on the trade effective. Because the bilateral trade between the two countries has been much attention. Bilateral trade has been showing a rapid growth trend since 2000. In 2000, the new bilateral trade $ 10.821 billion, which Singapore's direct exports $ 5.059 billion; Singapore's imports from China is $ 5.761 billion. Total trade grows more than six times just in ten years. In 2010, the new bilateral trade was $ 69.9 billion, which Singapore's exports to China of $ 24.71 billion, Singapore's imports from China $ 32.348 billion. Now China is Singapore's third largest trading partner, while Singapore is China's second largest ASEAN trading partner and the eighth global trading partner. So the second research point is trade effects of Singapore's direct investment in China.There are five parts of the paper:The first part is introduction. It includes the background and significance of this article, literature review, structured and innovative of the research and inadequate. In the literature review of this chapter, mainly summary the various analysis on Singapore direct investment in China and he trade effects of it of the international and domestic scholars.The second part describes the status quo of Singapore direct investment in China. It can be divided into three stages, and the break points are the Asian economic crisis and the international financial crisis. But these three stages are not simply due to the recession, they all have the characteristics of their own. Singapore's direct investment and economic changes with the times. The status quo analysis of Singapore direct investment mainly includes expanding size of Singapore direct investment, extending the region toward the western and eastern markets, and increasing the investment in the tertiary industry.The third part analyzes the motivation of Singapore's direct investment in China and the empirical analysis of the factors. The analysis of motivation is mainly from the external motivation and corporate internal motivation to study, in which the intrinsic motivation of Singapore's direct investment in China's main motivation, including lower production costs, to seize the Chinese market, economies of scale and the implementation of the global economic strategy. Singapore's direct investment in China is affected by many factors, including China's economic development, force of China's openness, the new wage rate, the exchange rate, the upfront capital and other effects. The force of China's openness is a decisive factor.Fourth part is the trade effects of Singapore's direct investment. It includes the effects of direct investment in China's import and export effects. this paper analyzes by a detailed and accurate data and empirical research, then analysis of the results and causes. Proof of Singapore's direct investment, whether it is imported from China to Singapore, or Singapore is China's export trade effects have played a facilitating role. To expand the size of Singapore direct investment in China will increase the new bilateral trade and deepening bilateral trade relations.Conclusion is theⅤpart. Mainly summarizes the results of earlier studies of this paper that the size of Singapore's direct investment will continue to grow; the motivation of its development has shifted from resource-based point to the market-based, strategy and efficiency point; many factors affect Singapore's direct investment in China; Singapore direct investment in China promote bilateral economic and trade relations. Therefore, China should be strongly to encourage direct investment enterprises of Singapore in China, and in the new stage of development we should be more standardized Singapore's corporate direct investment direction, investment and industry, thus speeding up our industrial upgrading and economic development pace.